Inner city living for low income earners may not be beyond reach

"We didn't even worry about trying because we knew we wouldn't be able to because I'm pretty much the only one working and I've got a missus and two kids."

That's Perth-based recruitment consultant Michael Zito, 26, on why he hasn't approached any banks for a potential home loan.

Instead, Mr Zito and his partner Michelle, have turned to the government lending agency Keystart to help turn their dream of owning a home into a reality.

"We actually just started looking at getting a Keystart loan to buy a house because we didn't have a 20 or 30 per cent deposit," he said.

"We wouldn't be able to borrow anywhere near the $300,000 plus that you need to buy a semi decent house.

"The most we could borrow is $220,000 which pretty much just buys a rundown old beat up house that you need to spend plenty of money on anyway."

It's a common complaint from first time homebuyers and one the Department of Housing's director general, Grahame Searle, is all too familiar with.

"If you were in private rental or in our accommodation, how do you actually get from there into home ownership?"

"Basically, $70,000 is about the median income in WA and we think it's people at that level who basically can't afford to get into the current market."

On offer

The department's solution has been to create its new SharedStart program, an initiative linked to the State Government's Affordable Housing Strategy which aims to provide 20,000 news homes by 2020.

The SharedStart program is targeted at singles earning less than $70,000 or couples earning less than $90,000 (or up to $110,000 in the north west of the state) who cannot afford to buy a home.

Mr Searle says this is the target market which is really struggling.

"On our figures people on $70,000 struggle to service anything above $280,000 in terms of value of property to mortgages and there's virtually none of that product available in Perth at the moment," he said.

"We're trying to create a new market to enable people to make that first step."

The way the department aims to do this is by providing 2,000 properties for sale, in which it will co-own up to 30 per cent of the home.

Michael Zito thinks this is the perfect option for his family.

"It's a good way to get your foot in the door if you can't afford to get a loan and buy 100 per cent of a house," he said.

He says the family needs three bedrooms, but other than that, they do not have too many requirements.

"We're happy really anywhere north of the river because that's where all our family and friends are," he explained.

The department's share of the home will depend on the applicant's borrowing capacity, household size, and the location and type of property they wish to purchase.

One of the conditions of the scheme is that the owner resides in the property for the life of the SharedStart loan.

Availability

SharedStart properties will be available across the state with initial offerings in Meadow Springs near Mandurah and inner city areas such as Subiaco, Northbridge and East Perth.

The Housing Minister Troy Buswell says the initiative will not only address the issue of housing affordability in the state but also act as a stimulus for the lagging construction sector.

"[This program] represents around $640 million of residential construction activity that the Government will be stimulating over the next two years," he said.

"That will be an important fillip for a residential construction sector in Western Australia which is currently very flat."

The Opposition's housing spokesman Mark McGowan is generally supportive of the initiative but he is concerned it will not do enough to alleviate the housing affordability crisis.

"The problem is always there's a few that get it and a lot that don't," he said.

Mr McGowan doesn't believe there are enough homes offered through the program and he's criticised the Minister for abolishing a similar scheme offered by the former Labor government.

For Michael Zito and his family, however, the new scheme offers an opportunity.

He can now view the properties on offer and he and his partner are excited by the prospect.

"We'll just look on the internet first as we don't want to get our hopes up until we've been approved I suppose."